Top 5 Rules Of SRS Contribution And Withdrawal!

Here are 5 rules of Supplementary Retirement Scheme (SRS) that you should note before opening an account and contributing to get tax relief.

#1 SRS Contribution is voluntary

Unlike CPF contribution which is mandatory if you are employed (which gives you CPF relief for the mandatory component of up to $20,400) , SRS contribution is fully voluntary.

You may contribute this year if there is a big bonus and not contribute next year if you decided to take a sabbatical .

The contribution LIMIT is $15,300 for Singaporeans and PR and $35,700 for foreigners.

Contributions MUST be done by 31dec2021 to be effective for IRAS to give the tax relief.

Open an account online with DBS, OCBC or UOB to start.

#2 The higher your income bracket is, the bigger the relief impact is!

Each dollar contributed to SRS brings a dollar of deduction to your CHARGEABLE INCOME TAX.

If you see the table below, what it means is the amount you save in taxes increases if you are at a higher tax bracket.

If your chargeable income is more than $40,000/year, up to $700 is saved per $10,000 contributed.

On the other hand, if your chargeable income is more than $160,000/year, up to $1,800 is saved per $10,000 contributed!

#3 10-year withdrawal window starts from age62 onwards

If you've opened an srs account and contributed, you lock-in statutory retirement age of 62. In future, that age will be increased.

Once passed the statutory age, you can opt to start withdrawing. When you do so you have a 10year window.

You are NOT forced to start at age62. It can be a later age.

For example age63-72 or age65-74.

It makes sense to start withdrawing your SRS only if you have stopped active work income. 

#4 Possible tax free withdrawal strategy

The first thing to note is 50% of your SRS will be tax free. 

Which means that if you withdraw $40k at the year you are age63, only $20k will be taxable income.

The second thing to note is that the first $20,000 is TAX FREE as shown below.

If you put the two rules together, it means you can withdraw $40k from your SRS for 10years and be tax free for it.

#5 For Life Annuities, the 10-year withdrawal does NOT apply

The 10year rule means that whatever investments NOT sold or amounts in SRS not withdrawn out at the end of 10years, it is DEEMED to be withdrawn then. Details stated below.

That becomes problematic because if you built up $1m in SRS and only consume out $40k per year, at the end of year10, there will be a BIG DEEMED income for whatever remains.

The solution is to look to invest your SRS into life annuity plans.

Annuity plans payout for LIFE and as stated above, you will continue to pay 50% of withdrawn amounts for life only.


Supplementary retirement scheme (SRS) is an important way to save taxes.

Contributing it is the first step and investing it properly is the next.

If you are looking for fee based full financial planning advice, click the link below to schedule a discussion.

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Josh Tan Jian Liang (CHFC) Principal Author

REVIEWS: https://theastuteparent.com/josh-tan Practising financial planner with Promiseland Independent Pte Ltd. TJL100057681 EXPERIENCE: More than 14years. Josh Tan is a young parent, speaker, author and founder of TheAstuteParent.

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